By including these well-run businesses within your portfolio, you can achieve peace of mind and a good night’s sleep.
Dividends are a sweet bonus that most blue-chip stocks offer that will bring a smile to income investors’ faces.
Businesses with growing profits and cash flows frequently increase the dividends they pay to shareholders.
We throw the spotlight on three stocks that recently raised their dividends and have the potential to continue doing so.
United Overseas Bank (SGX: U11)
United Overseas Bank, or UOB, is the third-largest bank in Singapore and provides a comprehensive range of banking, insurance, and investment services.
The lender is thriving in an environment of heightened interest rates as its net interest income (NII) is soaring along with these higher rates.
For its recent 2023 first half (1H 2023) earnings, the bank’s core net profit jumped by 35% year on year to S$2.9 billion on the back of a 37% year-on-year rise in NII.
The bank upped its interim dividend from S$0.60 last year to S$0.85, representing a 41.7% year on year increase.
There could be more such increases in the coming quarters as interest rates are poised to remain high with the US Federal Reserve committing to more rate hikes if needed to combat inflation.
The net interest margin (NIM) for 1H 2023 hit 2.13%, 0.5 percentage points higher than the 1.63% recorded a year ago.
UOB’s CEO expects NIM to remain stable at current levels while the bank enjoys a low to mid-single-digit year on year loan growth.
Fee income is also expected to grow by high single digits year on year.
Elsewhere, the bank is also on track to integrate the acquisition of Citigroup’s (NYSE: C) consumer banking business in four countries.
The integration has been completed in Malaysia and is slated for completion in both Thailand and Vietnam next year.
For Indonesia, the acquisition is on track to be completed by 2024.
The group is on track to enjoy a revenue uplift of close to S$1 billion this year from these four markets.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp Industries Ltd, or SCI, is an energy and urban solutions provider with a balanced energy portfolio of 19.4 GW comprising 11.9 GW of renewable energy capacity.
The group also has an urban development project portfolio spanning 13,000 hectares across Asia.
Like UOB, SCI also reported a sharp 56% year on year jump in net profit to S$608 million for its latest 1H 2023 earnings.
After excluding exceptional items, net profit still improved by 8% year on year to S$530 million.
An interim dividend of S$0.05 was declared, 25% higher than the S$0.04 paid out a year ago.
The group expects the longer tenure for its power purchase agreements in Singapore to provide stable earnings for 2H 2023.
Barring unforeseen circumstances, SCI expects its full-year underlying earnings to be higher for 2023 compared with 2022.
Sembcorp Utilities is also working with Petrovietnam Technical Services Corporation to jointly explore the development of offshore wind farms.
Should SCI report a higher core net profit for 2023, it could raise its final dividend above the S$0.04 that was paid out last year.
Genting Singapore Ltd (SGX: G13)
Genting Singapore is the owner and operator of the Resorts World Sentosa (RWS) integrated resort (IR).
The IR features six hotels, a casino, one of the world’s largest aquariums, a Universal Studios Singapore (USS) theme park, and a host of dining, retail, and entertainment options.
The ongoing travel recovery and the return of tourists from the region boosted the results of the IR operator.
Genting Singapore reported a 63% year-on-year surge in revenue to S$1.1 billion for 1H 2023.
Operating profit more than tripled year on year to S$350.8 million as gross profit more than doubled year on year.
Net profit also more than tripled year on year from S$84.4 million to S$276.7 million.
Genting Singapore’s free cash flow also leapt by 78.3% year on year to S$220.8 million.
With the significant surge in profits and free cash flow, the group raised its interim dividend by 50% from S$0.01 to S$0.015.
There could be more in store for the IR operator as the tourism recovery continues this year.
The group has also begun the construction on a new lifestyle cluster since May this year that will feature upscale restaurants, speciality shops, and entertainment outlets.
Should Genting Singapore report improved profits for 2023, it may increase its final dividend above the S$0.02 that was paid out in 2022.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.